Russians have increased cash withdrawals as mobile internet shutdowns disrupt card payments and businesses seek to avoid tax, adding pressure to a slowing wartime economy. The Central Bank reported that cash in circulation rose by 1.56 trillion roubles since the start of the year, the largest increase for any year outside the Covid‑19 pandemic. The rise follows a partial mobilisation in September 2022 and a Wagner mercenary group mutiny in June 2023. Mobile internet has been shut down repeatedly in regions affected by Ukrainian drone attacks, limiting electronic payment options. The increase in cash usage complicates tax collection, according to the Central Bank, as the budget deficit widens and war funding demands grow. In May, the economy ministry lowered its 2026 GDP growth forecast to 0.4%, the weakest projection since 2022. To raise revenue, the Kremlin raised VAT from 20% to 22% in January and reduced the threshold for small and medium enterprises to pay the tax, prompting many firms to handle more transactions in cash. Pharmacies, restaurants, beauty salons and market stalls have reported higher cash transactions to keep revenue below the VAT threshold and to avoid payroll taxes. Taras Skvortsov, chief financial officer of Sberbank, said that more wages are being paid in cash envelopes and that cash is staying in people's hands rather than returning to the banking system. A May survey by Opora Russia found that about 6% of entrepreneurs were using grey schemes such as omitting cash‑register receipts to cope with the higher tax burden. Cash wages allow businesses to avoid payroll taxes, while cash sales help them stay below the VAT registration level, according to the survey. The Kremlin has made cracking down on the shadow economy a priority, and President Putin warned before the VAT increase that the new rules must not push firms into illegal activity. Alexander Kolyandr, a senior fellow at the Center for European Policy Analysis, noted that one government arm is raising taxes and fines while another is restricting tax collection through mobile shutdowns, undermining the tax‑revenue strategy. Despite interest rates on one‑year deposits reaching 10%, Russians withdrew 550 billion roubles from bank accounts in May, including 200 billion roubles from fixed‑term deposits. A copywriter in Moscow reported that a vinyl shop offered a cash discount to offset higher taxes, and that people were moving between ATMs during the May Victory Day security period to obtain cash. Analysts say the growing reliance on cash could further limit the government's ability to fund the war and collect revenue, and the future impact remains unclear.
Macro signals, central banks, earnings, and the deals moving capital today.
Chinese exports increased 18 percent in the first half of 2026, according to Beijing customs data, sparking concerns of a second China shock that could deepen deindustrializatio...
Chinese exports increased 18 percent in the first half of 2026, according to Beijing customs data, sparking concerns of a second China shock that could deepen deindustrialization in Europe and other regions. The surge follows Beijing’s effort to offset a multiyear property market downturn that erased about $10 trillion in household wealth, prompting the government to expand manufacturing capacity for electric vehicles, lithium‑ion batteries and solar equipment. Export growth is driven by high‑tech goods such as electric vehicles and semiconductors, while domestic demand remains weak, leaving factories with excess output that is being shipped abroad; U.S. imports from China were essentially flat in the first half of the year, though American data show a 30 percent decline through May. Chinese firms are circumventing tariffs by routing goods through Vietnam, Mexico and other countries, leading to notable increases in imports from those nations; LC Sign, a Guangzhou‑based sign manufacturer, expanded its workforce to about 350 employees after a tariff‑related sales dip in 2024, and its U.S. sales have recovered since a truce between the United States and China reduced trade barriers. European leaders, including German Chancellor Friedrich Merz and French President Emmanuel Macron, have called for coordinated action to protect regional industry, and the European Union plans to lower its steel tariff‑free quota and consider broader industrial subsidies and domestic content requirements; Volkswagen has announced the closure of four German plants and a reduction of 100,000 jobs as it seeks to compete with Chinese automotive manufacturers, which are expanding capacity for an additional five million vehicles annually. The situation remains unresolved, with the United States preparing additional tariffs aimed at excess capacity, while China’s leadership has signaled a shift toward stimulating household consumption, and the European Union is expected to unveil its policy package in September.
Bozeman, Montana experienced a roughly 20% population increase since 2019, driven by an influx of out‑of‑state residents attracted by low taxes and the popularity of the television series “Yellowstone.” The rapid growth has pushed home values up about 40% in two years and driven rents higher, creating a clear divide between longtime locals and newcomers.
The state has long drawn conservatives seeking low sales, luxury and inheritance taxes, and the pandemic amplified migration from the East and West coasts, according to Mark Corner, president of Southwest Montana Realtors. Private jets now regularly land at the local airport, with 80 to 100 private aircraft on the tarmac each day, primarily serving guests of the exclusive Yellowstone Club, Corner added. Local buyers were systematically outbid by cash offers from out‑of‑state residents, leading the state realtor association to add a disclosure form for sight‑unseen purchases.
Home values have risen about 40% in two years, Corner said, while apartment construction has accelerated, with one‑bedroom rents exceeding $2,000 per month. A rent strike at two mobile home parks, organized by the Bozeman Tenants United, protested an almost $100 increase in monthly plot fees; the park was later sold to a California‑based management company, leaving residents uncertain about their housing security. Mayor Joey Morrison, elected in November 2023 on an affordable‑housing platform, said that many residents now work multiple jobs, delay having children, or commute longer distances.
Representative Katie Fire Thunder and union leader Sam Forstag, both young progressive figures, have highlighted the mismatch between local needs and state‑level decisions that favor wealthier residents. The situation remains unresolved as housing supply struggles to keep pace with demand, leaving the future of affordable options uncertain.
Parents are advised to guide teenagers in managing earnings from summer jobs.
The 2026 State of Teen Financial Literacy report by Everfi, which surveyed 160,000 high school students, found that 60 percent of juniors and seniors feel only somewhat, a little, or not at all prepared to set up and follow a basic budget. More than half of these teens say they are underprepared to manage checking and savings balances without overdrawing.
Data indicate that 20 percent of teens cannot recognize or avoid online scams, according to the Federal Trade Commission.
Financial experts recommend that parents act as business partners, offering guidance without micromanaging purchases.
They suggest allowing teens to use their earnings for personal expenses such as movies or video games, while pointing out when spending limits other necessary items.
Parents can ask teens to contribute to household expenses including cellphone bills, transportation, or streaming subscriptions if the family does not rely on the income for essential needs.
Opening a custodial Roth IRA is presented as a way to promote long‑term savings; contributions may be matched by parents up to the 2026 IRS limit of $7,500.
Establishing a credit history can be introduced later through a secured credit card that requires a cash deposit and reports on‑time payments to credit bureaus.
Directing earnings toward a 529 plan is recommended to support college savings, especially when other funding is insufficient.
Transparency is emphasized; parents are encouraged to review bank balances with teens and discuss spending patterns.
Finally, the article asks whether parents should retain final authority over a teen’s spending decisions, inviting comments to colorofmoney@washpost.com.